THE GAME THEORY OF DELTA ON OVERBOOKED FLIGHTS

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After the United Airlines created a deep mess for itself by dragging passenger off a full flight last week, Delta announced its change of policies.

Delta said for passengers who voluntary denied boarding will be given payback. To entice passengers, agents are permitted to offer up to $2,000 and almost $10,000 for is permitted to agents’ supervisors.

Delta has clear aim to tackle with oversold flights by the price incentive policy. Moreover, its main focus is to reduce the denied boarding situations.

But, to add to the challenges, the compensation would rather come in the form of travel credits than cash. This will surely make the side payments hard to secure and complicated. Keeping in mind the non-genuine participation by passengers, this is as far a risk-free payout.

However, it seems that Delta’s proposal is nothing but a clever public relation strategy that is aimed at taking away the market share of other airlines away. The most probable outcome of this policy is not giving the headline-grabbing news of passengers like United. Airline is focusing on reducing the number of seats, which they sell on oversold flights rather than providing eye-catching payments to passengers. And, in this scenario, if passenger cancels the flight at last minute, some seats will remain empty for popular routes.

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Dean Anderson

For any feedback contact Dean Anderson at Dean.Anderson@themarketdigest.org

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